On-Us Item
An on-us item is a check or draft that is presented to the bank where the check writer has the funds on deposit, as opposed to the depositor's bank (although in some cases both check writer and depositor may happen to use the same bank). An on-us item is a check or draft that is presented to the bank where the check writer has the funds on deposit, as opposed to the depositor's bank (although in some cases both check writer and depositor may happen to use the same bank). In a typical credit card process, for example, an acquirer (a merchant’s bank) both processes and settles a merchant's credit card transaction. Intra-regional transactions occur when acquirers and issuers are from different regions yet still to an established geographic grouping, such as Europe Single Euro Payments Area (SEPA) or GIM UEMOA, a banking group of the Economic and Monetary Union of West Africa. An on-us item refers to a check or payment that is deposited or processed by the bank issuing or initiating the payment.
What Is an On-Us Item?
An on-us item is a check or draft that is presented to the bank where the check writer has the funds on deposit, as opposed to the depositor's bank (although in some cases both check writer and depositor may happen to use the same bank). The check can then be cashed or deposited into another account.
Of course, the drawing account must have a sufficient balance to pay the check.
Understanding On-Us Items
On-us items can be very beneficial for banks conducting the transactions as they often obtain revenues from both the acquiring and issuing sides of the payment. In on-us transactions, there is often no need to go to an outside network to obtain authorization or funds for the exchanges, which may carry additional fees or surcharges. On-us checks may also be referred to as "house checks.”
On-us items can also be in the form of electronic debits or transfers. As with checks, electronic on-us items refer to the drawing and paying accounts at the same bank.
On-Us Versus Other Forms of Transactions
In addition to on-us items, a number of other categories of bank transactions exist. These include, but are not limited to, a not-on-us transaction, an international or cross border transaction, and intra-regional transactions. Not-on-us items occur when the acquirer and issuer bank are separate. In a typical credit card process, for example, an acquirer (a merchant’s bank) both processes and settles a merchant's credit card transaction. After a merchant swipes a credit card, the merchant’s bank requests authorization for the sale. This request is routed to the card-issuing bank prior to the completion of the sale.
International or cross border transactions are defined as when an acquirer and issuer are from different countries. Intra-regional transactions occur when acquirers and issuers are from different regions yet still to an established geographic grouping, such as Europe Single Euro Payments Area (SEPA) or GIM UEMOA, a banking group of the Economic and Monetary Union of West Africa. GIM UEMOA represents over eighty regional financial institutions and more than 80 million individuals.
Related terms:
Bank of First Deposit (BOFD)
The Bank of First Deposit (BOFD) is the bank where a check is initially deposited to an account. read more
Check
A check is a written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee. read more
Checking Account
A checking account is a deposit account held at a financial institution that allows deposits and withdrawals. Checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods. read more
Debit
A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet. read more
Debit Card
A debit card lets consumers pay for purchases by deducting money from their checking account. Learn how debit cards work, their fees, and pros and cons. read more
Drawing Account
A drawing account is maintained to track money withdrawn from a business by its owners. It is used primarily for businesses that are taxed as sole proprietorships or partnerships. read more
Foreign Transaction Fee
A foreign transaction fee is a 1%–3% charge for transactions made using a domestic payment card in a foreign country. read more
Payment Gateway
A payment gateway is the front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing. read more
Single Euro Payments Area (SEPA)
The single euro payments area (SEPA ) harmonizes the way bank transfers, denominated in euros, are executed between participating countries. read more
Transit Item
A transit item is any check or draft that is issued by an institution other than the bank where it was initially deposited. read more